Ian uninsured flood losses could top $10 billion

With Hurricane Ian bringing massive storm surge and inland flooding, Floridians could have more than $10 billion in uninsured flood losses, according to an analysis by CoreLogic, a property-information and analytics firm.

CoreLogic released a projection last week of $10 billion to $16 billion in uninsured flood losses in Florida. That is in addition to the firm's estimate of $30 billion to $48 billion in insured wind and flood losses in the state.

Residents who have mortgages on properties in designated flood zones are required to have flood insurance, which is mostly purchased through the National Flood Insurance Program. But most Floridians don't have flood insurance, exacerbating problems from Ian, which caused flooding across the state.

Property owners face the possibility of cleaning up water damage without the financial backstop of insurance.

"This is going to be a big flood event, unfortunately. … At the end of the day, what we do know is that not enough policyholders have flood insurance in the state of Florida, and this is going to be a big flood event, and homeowners policies do not cover flood insurance," Fred Karlinsky, a prominent insurance attorney and lobbyist with the Greenberg Traurig firm, said during a taping of the "Deeper Dive with Dara Kam" podcast with News Service of Florida senior writer Dara Kam. The podcast was to be posted online by City & State Florida, a sister publication of the News Service.

In a news release, CoreLogic described inland flooding from the storm as "extreme" and pointed to areas along the Peace River, which flows through hard-hit places such as Hardee, DeSoto and Charlotte counties.

Meanwhile, the analytics firm pointed to broader effects from the hurricane on the real estate market. Tom Larsen, senior director of hazard and risk management for CoreLogic, said in a prepared statement that "extra costs incurred from the surge in repair needs simultaneous with a fragile economy are headwinds to rapid reconstruction and we should expect to see resident displacement and housing affordability issues in the state for some time to come."

"Housing markets in Florida will face difficult times as many Florida residents have been impacted by the devastating storm," Selma Hepp, interim lead of CoreLogic's Office of the Chief Economist, said in a statement. "Initially, we are likely to see an increase in mortgage delinquencies as is typical following catastrophes. Also, rents are likely to jump as households who lost their home seek immediate shelter. Longer term, home price growth in hard-hit areas is likely to lag that of the rest of the state and nation as people may opt to move to areas less prone to natural disasters. CoreLogic observed this trend in the Gulf Coast region following Hurricanes Laura, Delta and Ida (in 2020 and 2021)."

Numbers of insurance claims have steadily increased as residents and business owners returned to properties damaged in the Category 4 storm, which made landfall Sept. 28 in Lee and Charlotte counties before crossing the state.

While estimates of insured losses have varied, they are in the tens of billions of dollars. That has sparked widespread speculation about the effects on Florida's already-troubled property insurance industry.

But while residents grapple with rebuilding, the Fitch Ratings agency released an analysis that offered a bit of good news for the state: Fitch said toll roads, ports and airports that it rates are expected to have hurricane damage that is "minimal and short-lived." ¦

— News Service senior writer Dara Kam contributed to this report.